Fresh allegations surfaced on Monday that China's military has hacked other nation's networks to nab sensitive data, charges that the country denied for the second time in two weeks.

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The Chinese government has always opposed any Internet-wrecking crime, including hacking, and cracked down on it according to the law. Some people are making wild accusations against China and wantonly saying the Chinese military attacked the Pentagon's computer network. These are totally groundless and also reflect a Cold War mentality.
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Jiang Yu, spokeswoman, Chinese Foreign Ministry

On Monday, the Financial Times reported that unnamed U.S. military officials told reporters that the Chinese military had hacked into Pentagon computers in June, in what they characterized as "the most successful cyberattack" to date on Department of Defense computers. The report come a week after German news magazine Der Spiegelalleged that the Chinese had hacked into German government computers. Both governments expressed a high degree of confidence that the information breaches led back to operations run by China's military, the People's Liberation Army (PLA).

Chinese officials vehemently denied the allegations.

"The Chinese government has always opposed any Internet-wrecking crime, including hacking, and cracked down on it according to the law," Chinese Foreign Ministry spokeswoman Jiang Yu said in a statement carried by China's news agency, Xinhua. "Some people are making wild accusations against China and wantonly saying the Chinese military attacked the Pentagon's computer network. These are totally groundless and also reflect a Cold War mentality."

Increasingly, nations are calling China to account for computer espionage and network breaches emanating from the world's most populous nation and directed at sensitive targets.

In 2005, SecurityFocusreported that security firms and government response agencies had warned that e-mail messages carrying malicious code were targeting specific individuals at large corporations and sensitive government agencies. Two months later, an article in Time Magazinerevealed that a network-security manager at Sandia National Laboratories, Shawn Carpenter, had worked with U.S. government officials for nearly two years to track such attacks back to China. The U.S. even had a codename for the attacks: Titan Rain.

"Our intellectual property is being systematically looted," said Carpenter, now a principal forensics analyst at NetWitness, a maker of digital forensics tools. "If you can steal this stuff and gain an advantage in the economic or intelligence world -- or even militarily -- why not leverage that. I think this is the new battlefield."

Economic espionage connected to China has increased dramatically in the last decade. A German official estimated that two-thirds of the economic espionage cases currently being investigated by the country's law enforcement are linked to China, according to Der Spiegel. In the U.S., the FBI has estimated that a third of all economic espionage cases are linked to the Chinese and have boosted the number of agents assigned to combat Chinese espionage to 350, from 150 in 2001, according to USA Today.

It's natural that such activity has moved online, said Mikko Hyppönen, chief research officer for antivirus firm F-Secure. As the information of interest to spies has increasingly become digital and stored in locations more accessible to remote users, the act of spying has changed as well, he said.

"What is spying? It is the act of collecting information, and that information used to be in files and binder, but now its in laptops and hard drives and can be more easily moved," Hyppönen said. "The espionage guys would be stupid not to take advantage of the fact that information has changed, and they no longer have to travel to get access to it."

Hyppönen believes the cases of hacking are linked to each other and emanate from a single source, likely within China.